Successful Minneapolis Homebuyer Program to Bring
More People to Foreclosure-stricken Areas
New Funding Means 200 Loans for Homebuyers
February 20, 2009 (MINNEAPOLIS, MN) – Mayor R.T. Rybak today approved funding for the Minneapolis Advantage program, adopted by the Minneapolis City Council, that will help rebuild the housing market in key neighborhoods with high levels of mortgage foreclosures. $2 million will fund 200 loans for eligible and qualified buyers for the purchase of homes in specific targeted neighborhoods of the City.
The successful program was piloted last year and new funding by the City and Federal Home Loan Bank of Des Moines will fund loans of $10,000 each at zero-percent interest. Applications will be accepted beginning April 2, 2009.
"The key to rebuilding neighborhoods overwhelmed by foreclosures is to get solid, responsible homeowners into these neighborhoods," said Mayor Rybak. "The success of the Minneapolis Advantage program has shown us that there are great homes to be had and that people are ready to move into these neighborhoods. Our job is to help make that happen and this funding will make our job a whole lot easier."
"Now is a great opportunity for first-time home buyers," said City Council President Barbara Johnson. "Minneapolis has a great housing stock, and thanks to our partners, the City is working to restore a healthy housing market by bringing people back on the blocks."
"Minneapolis is fortunate to have developed strong partnerships with both the public and private sectors that are helping the City rebuild, reposition and restore a healthy housing market in neighborhoods most distressed by the foreclosure crisis," said Tom Streitz, Director, Housing Policy and Development, City of Minneapolis.
Minneapolis Advantage program details
• Purchasers must have an income of less than 120% of the area median income ($97,080) and the property must be the purchaser’s primary place of residence.
• Purchasers must receive a traditional (prime or A-rated), fixed-rate first mortgage loan or purchase with cash.
• A loan of $10,000 at zero-percent interest is forgiven at the end of five years if the purchaser continues to occupy the home as a primary place of residence.
• The loan can be used as assistance with down payment, closing costs, and home repair costs.
• The property can be a single family dwelling or duplex within an eligible neighborhood.
• Two options, depending on income limits, are available:
1. For incomes below 80% area median income:
Purchase of a foreclosed home in the following neighborhoods: Bryant, Sheridan, Lind-Bohanon, Ventura Village, Whittier, Audubon Park, Holland, Phillips West, Cleveland, McKinley, Harrison, Powderhorn Park, Webber-Camden, Midtown Phillips, Folwell, Near North, Central, Willard-Hay, Jordan, Hawthorne, East Phillips, Beltrami.
2. For incomes below 120% area median income:
Purchase of a foreclosed home or a home on the City’s 249 vacant and boarded buildings list, OR a vacant home for at least 30 days in the following neighborhoods: Corcoran, Bottineau, Regina, Victory, Bryant, Sheridan, Lind-Bohanon, Ventura Village, Whittier, Audubon Park, Holland, Phillips West, Cleveland, McKinley, Harrison, Powderhorn Park, Webber-Camden, Midtown Phillips, Folwell, Near North, Central, Willard-Hay, Jordan, Hawthorne, East Phillips, Beltrami.
Home buyers must apply for a Minneapolis Advantage loan through their first mortgage lender. Loans will be given on a first come, first serve basis.
For more information about the loan program call Greater Metropolitan Housing Corporation at 612-588-3033.
Questions about purchasing in:
• North Minneapolis, call 612-588-3033
• Northeast Minneapolis, call 612-378-7985
• South Minneapolis, call 612-378-7985
Questions about purchasing in:
• North Minneapolis, call 612-588-3033
• Northeast Minneapolis, call 612-378-7985
• South Minneapolis, call 612-378-7985
Information is also available online at Minneapolis Advantage.
Results of the pilot Minneapolis Advantage program, launched in May 2008
The Minneapolis Advantage program has effectively encouraged people to buy homes in communities stressed by foreclosures:
Properties Purchased:
• 62% of the pilot project loans purchased foreclosed properties and 9% of the loans purchased boarded and vacant properties.
• 62% of the properties, registered as non-homestead prior to being purchased, now have a homestead status.
• The pilot program had a mix of purchase prices, but more than 50% of the buyers bought homes under $100,000 and 82% purchased homes under $150,000.
• Half of the eligible neighborhoods were in North Minneapolis; 80% of the homes purchased were located there.
Map of Properties Purchased Using the Minneapolis Advantage pilot program.
Buyers:
• Since home prices were low, the program made home buying affordable. Even though there were no income restrictions, 76% of the buyers were at 80% MMI or less.
• The majority of the buyers were younger, with 57% younger than 36 years old.
• 78% of the buyers were first-time homeowners.
• 65% of the homeowners are White (not Hispanic); 13% are African-American; 19% are Asian; 3% are of two or more races.
• Nearly 30% of the households moved from the suburbs or Saint Paul, and of those, 95% moved to the eligible North Minneapolis neighborhoods.
Published Feb. 20, 2009